Co-chairs have published a new draft NCQG finance text goal and multilateral development banks forecast $170 billion of climate finance by 2030
Finance: Everything back on the table
Yesterday, developing countries told the co-chairs of the talks on a new climate finance goal to put all the options they wanted back into a nine-page text that had been slimmed down as a basis for negotiations. They went away last night and did so – and at 8.30 this morning they released a new text, which is 34 pages long.
Fernanda Carvalho, WWF’s climate and energy policy lead, described the ballooning length as “frustrating” because “after three years of preliminary talks, we had hoped to see a more streamlined text at this point”. She noted that the “swollen draft text puts everything back on the table – both good and bad options”.
The basic options on the structure of the New Collective Quantified Goal (NCQG) remain the same in both texts. The first option is a goal for a certain dollar amount, consisting of finance provided by governments and private finance mobilised by their money.
The second is a provision and mobilisation goal, plus a wider investment goal that includes private and domestic finance. As this goal is “multi-layered”, it has been compared to an onion – and it’s what developed countries want.
There are several different proposals for the size of the government finance goal: $100bn+, $1tn+, $1.1tn, $1.3tn+ or $2tn. Developed countries want less and developing countries want more, with the G77 and China umbrella group jointly pushing for $1.3tn+.
On who pays, both texts include the same options – either just developed countries or various criteria to identify a larger set of contributors based on countries’ wealth and emissions. The African Group’s lead negotiator Ali Mohamed said today that attempts to widen the contributor base beyond developed countries were “why we had to reject the earlier draft”.
Newly arrived in the text are specific proposals for minimum amounts that should go to Least Developed Countries (LDCs) and Small Island Developing States (SIDS). The latest text has options for $220bn for LDCs and $39bn for SIDS in grant-equivalent terms each year.
It also introduces options specifying that climate finance should transition away from fossil fuels or “emissions intensive investments”. That might seem obvious but it’s not, for example, to the Asian Infrastructure Investment Bank – which last year counted its investment in a gas-fired power plant in Bangladesh as climate finance.
Both the new and old texts have – outside brackets, suggesting it’s uncontroversial – commitments to phasing out “inefficient fossil fuel subsidies that do not address energy poverty or just transitions”. But the new text adds a target date of 2025 alongside the previous text’s options of 2035 and “as soon as possible”.
In brief…
Fossil fuel emissions still rising: Carbon dioxide (CO2) emissions from fossil fuels worldwide are expected to grow 0.8% in 2024, belying predictions of a peak, according to the Global Carbon Project. That’s higher than the average growth rate of 0.6% per year over the past decade and follows a rise of 1.4% in 2023. Global fossil CO2 emissions are now 8% higher than in 2015, when the Paris Agreement was negotiated. Emissions from coal use are set to increase 0.2% in 2024, hitting another record high, due to growth in India and China.
Youth take on NDCs: Youth-led organisations are calling for a “Universal NDC Youth Clause” to be included in countries’ updated national climate plans, urging governments to involve young people more actively in climate strategies. The proposed clause has three pillars: recognising young people as essential drivers of climate action, collaborating with youth in developing the NDCs, and educating young people on the impacts of climate change. At the launch, the organisations noted that “several governments” are expected to announce commitments to the clause in the coming days.
